Ok - Thought perhaps I was missing something. The analogy probably isn't a good fit for luxury watches, which is a truly weird industry. Rolex, with their near-mythological status could probably shut down all advertisement and still sell their watches.

But your original point might still be true, regardless.

I disagree, most luxury pricing is weird and counterintuitive. Rolex only has a "near-mythological" status because of all of their advertising. To give another example, we all know a lot about the iPhone, yet Apple put up far more billboards and other advertising for their new phones than anyone else.

Better comparison might be Seiko / Grand Seiko, considerably cheaper than a Rolex for the same quality of watch.